Having already been a third party vendor for health care products over the past decade, Amazon is considering expanding its scale of distribution in health care industry. From online bookstore to a behemoth commerce company, Amazon has the consumer market necessary for such a jump. But what are the implications for other distributors of medical supplies?
Amazon’s brazen introduction into the field could awaken increased competition among other distributors, something that would bring costs down and encourage innovation. The intricacies of health care as an industry are complex, and may take a long time for any new challenger to overcome, but the logistics and infrastructure are already in place for Amazon.
Through the rapidly expanding initiative called Amazon Business, a wide selection of medical supplies, from sutures to beds, have been made available over the past year. According to Amazon executives, Amazon Business has generated roughly $1 billion in sales and is poised for continued growth. In a February 2016 report, the US was estimated to have an annual 4.2% increase in the sale of disposable medical supplies, raising the market to $54.1 billion by 2020. Groundbreaking research has lead to the creation of new products based on improved materials and designs that will benefit growth. However, many of these developments in minimally invasive and noninvasive techniques will reduce the need for disposable medical supplies. This shifts the balance of funding from replaceable materials to permanent equipment. Capitalizing on this, Amazon has also made moves into the pharmaceutical industry, recently hiring health care experts and listing job openings for similar positions. Will the next evolution of health care be labelled with Amazon Prime?